$12 Million of Illinois Medicaid Dollars Paid for Services Rendered to the Deceased

Who would want state Medicaid dollars paying for services that are not medically necessary?  What about services getting paid out for services rendered to dead people?

I mean, I am no doctor, but I fail to see why someone who is deceased would need dentures, dialysis, or a wheelchair.

Yet, the state of Illinois recently identified that it paid overpayments for Medicaid services to roughly 2,900 people after the date of their deaths, equaling approximately $12 million.  See AP story.

How do state agencies verify eligibility for the multi-million number of Medicaid recipients within a state? Or, for that matter, how does the federal government determines eligibility for the nation’s Medicare population?  Determining eligibility for Medicaid and Medicare is a large-scale, daunting task for both the federal government and the state government.

A key component of Medicaid and Medicare eligibility is that the person receiving the services is alive.  Yet Illinois failed to check on the status of Medicaid recipients’ lives.

Improper payments of $12 million for Medicaid services delivered to the deceased are, obviously, disconcerting for taxpayers.  We want Medicaid services to be provided to those people who need the services, and I cannot fathom what Medicaid services a deceased person would need.

Apparently, who determines Medicaid eligibility in Illinois has been a hotly, disputed and ideologically polarized debate.  Illinois had hired Maximus Health Services, a private company, to verify Medicaid eligibility, including determining which recipients passed away. The company was said to be achieving a Medicaid eligibility-removal rate of 40 percent.  Last year the contract between the state of Illinois and Maximus ended and the work was transferred into the hands of state employees.

The question remains in my mind, however, who has the duty to inform the state that a Medicaid recipient has passed away?  Is the burden on the state employees to discover the deaths, as it appears to be in Illinois? Are Medicaid providers continuing to bill for deceased recipients?  Obviously the deceased person does not have the burden to inform the state of his or her passing.  Where should the responsibility lie? And where does it lie?

Illinois Governor Pat Quinn blamed the managed care companies.  He stated that, in most of the cases that managed care insurance companies incorrectly billed for Medicaid services for deceased people.

This brings up another entity on which the burden of discovering the deaths of Medicaid recipients may lie.

We, in North Carolina, have a messy, unsupervised managed care organization (MCO) system for those suffering with mental health issues, are developmentally disabled and suffer from substance abuse.  We currently have 10 MCOs, which are all in the process of merging to form only 3-4.  Are the MCOs responsible for knowing when Medicaid recipients die?

Our State Auditor, Beth Wood, has not conducted a similar audit in North Carolina, to my knowledge, but it would not surprise me if NC is also providing Medicaid services to the deceased.

To my knowledge, the federal government has not conducted an audit of the Medicare services to determine whether Medicare funds are being spent on the deceased.  Again, I would not be surprised to discover that Medicare funding is being spent on those whom have passed.

This is yet again another example of how the failure of the state government to supervise itself and its contractors costs taxpayers money.


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 22, 2014, in Accountability, Affordable Care Act, Behavioral health, Beth Wood, Budget, Division of Medical Assistance, Doctors, Eligibilty, Federal Law, Health Care Providers and Services, Illinois Medicaid, Increase in Medicaid Spending, Legislation, Managed Care, MCO, Media, Medicaid, Medicaid Billing, Medicaid Budget, Medicaid Costs, Medicaid Eligibility, Medicaid Providers, Medicaid Recipients, Medicaid Reimbursements, Medicaid Services, Medicaid Spending, Medical Necessity, Medicare, Medicare and Medicaid Provider Audits, Medicare Budget, Mental Health, Mental Illness, NC, NC DHHS, North Carolina, Number of Medicaid Enrollees, Office of State Auditor, Regulatory Audits, Self-Audits, Tax Dollars, Taxes, Taxpayers and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. Stephen Melton

    Awesome observation !
    Should’t you qualify for a “qui tam” vs state and federal mismanagement?

    Sent from my iPhone


  2. Since the dead are still able to vote in Illinois, it should be no surprise that they continue to receive medical care to assure that they can get to the polls. ;-(

  3. David Hancock

    Medicaid relies on information from the vital statistic agency within the state. This information is either forwarded monthly or quarterly. In addition, the Federal government provides a “death master file” of deceased citizens on an annual basis. Also, if the state is doing their job appropriately, they can identify death from the Medicare premium files exchanged with CMS. This information feeds the MMIS / MCO for claims processing. MMIS and Managed care are downstream from the cancellation of coverage for death. Eligibility departments and their corresponding systems make this determination. The lack of updates combined with fraudulent / mistaken providers can generate the overpayments discussed in the blog. Like many things in government healthcare – no single source of data can be relied upon to achieve a comprehensive solution.

  4. David Hancock

    I should also add that Illinois eligibility (DHS) and claim processing (HFS) are housed in separate agencies. Illinois’ switch to risk managed care (similar to recent moves by KY, FL, TX, MS) likely does not resolve what is essentially an eligibility issue.

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